Recording Business Transactions

Added on - 04 Oct 2020

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Recording businesstransactions
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1Part A...............................................................................................................................................1A) Recording transactions of business...................................................................................1B) Balancing the accounts of firm..........................................................................................3C) Trial balance......................................................................................................................7D) Producing income statement.............................................................................................8E) Statement of financial position..........................................................................................9Part B.............................................................................................................................................121. Calculation of financial ratios..........................................................................................122. Performance comparison with competitors......................................................................13CONCLUSION..............................................................................................................................15REFERENCES..............................................................................................................................16
INTRODUCTIONAccounting is required in every business so that financial statements may be prepared tobe analysed by users of financial information quite effectively. Present report deals withrecording of business transactions in books of Philip. Moreover, general ledger accounts areprepared and trial balance is extracted out. Income statement and balance sheet both areprepared. Financial ratios are computed to analyse financial health of business. Thus, accountingis quite relevant to businessPart AA) Recording transactions of businessIn the books of PhilipDateParticularsLFAmountAmount1-Sep-17Bank a/c Dr4000To Capital a/c4000(Being business commenced)2-SepPurchase a/c Dr350To Accounts Payable a/c350(Being goods purchased oncredit)3-SepPurchase a/c Dr300To Bank a/c300(Being goods purchased bypaying through cheque)1
5-SepCash a/c Dr550To Sales a/c550(Being goods sold in cash)6-SepPurchase a/c Dr228To Accounts Payable a/c228(Being goods purchased oncredit)10-SepRent a/c Dr30To Cash a/c30(Being rent paid in cash)12-SepOffice stationery a/c Dr54To Cash a/c54(Being stationery purchased bytrader)18-SepAccounts Payable a/c Dr46To Purchase return a/c46(Being goods returned to MSmith)21-SepBank a/c Dr10To Rent a/c10(Being rent received for part of2
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